- iRobot became synonymous with home robots when it introduced the Roomba vacuum over 20 years ago, eventually selling 50 million models and becoming an acquisition target for Amazon. But the company gave investors a stark warning Wednesday, saying it may go out of business as sales and headcount plummet.
After dominating the domestic robot category for three decades, Roomba creator iRobot says going out of business is a real possibility.
In its annual earnings report on Wednesday, iRobot said there was “substantial doubt about the Company’s ability to continue as a going concern” and that it was exploring “a broad range” of options, including a potential sale or refinance of its debt. It canceled a planned investor call, scheduled for Wednesday, and declined to give guidance for 2025.
iRobot adjusted its term loan agreement and hired Canaccord Genuity and BofA Securities as financial advisors for the strategic review.
In the fourth quarter of 2024, iRobot’s revenue plunged by nearly half in the U.S., one-third in Japan and over 40% in Europe, the Middle East and Africa. Sales for the quarter fell to $172 million, down 44% from the year before and below the $180 million Wall Street was expecting.
iRobot’s stock similarly plunged on the news, closing down 35% on Wednesday.
iRobot has struggled since the start of last year after a planned acquisition by Amazon fell through. Over the course of 2024, the company slashed its headcount by half, leaving just over 500 employees, cut marketing expenses, and parsed inventory, it said.
“iRobot has defined the robotic floorcare category for more than 30 years, and we remain committed to growing and evolving our business across smart home categories amidst a dynamic operating landscape,” CEO Gary Cohen said in a statement, vowing that the company would “reclaim our position as the industry leader.”
Started in 1990 as a maker of military robots, iRobot launched its first domestic machine, the disc-shaped Roomba, in 2002. Just two years later, it had sold a million Roombas and inspired a million videos of cats riding vacuums.